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Note 11 - Shareholders' Equity

12 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Shareholders' Equity and Share-Based Payments [Text Block]

NOTE 11. SHAREHOLDERS’ EQUITY

The Company has three classes of common equity: class A, class B, and class C common stock. The Company’s class A common stock is traded over-the-counter and is quoted daily under NASDAQ’s Capital Markets under the symbol “GROW.” There is no established public trading market for the Company’s class B and class C common stock. There are no shares of class B stock issued as of June 30, 2025, or 2024.

The shareholders of class C common stock have voting rights, and the shareholders of class A and class B common stock have no voting rights. Shareholders of class C common stock are allowed to convert to class A common stock. During fiscal year 2025, and 2024, no shares were converted from class C to class A. Conversions are one class A share for one class C share and are recorded at par value. There are no restrictions or requirements to convert.

Dividends

Dividends totaling $1.0 million and $1.1 million were paid to holders of class A common stock in fiscal years 2025 and 2024, respectively. Dividends of $186,000 were paid to holders of class C common stock in fiscal years 2025 and 2024. The dividend rate per share for both classes was $0.0075 per month during fiscal years 2025 and 2024.

As of June 30, 2025, the Board has authorized a monthly dividend of $0.0075 per share through September 2025, at which time it will be considered for continuation by the Board. Payment of cash dividends is within the discretion of the Company’s Board of Directors and is dependent on earnings, operations, capital requirements, general financial condition of the Company and general business conditions. On a per share basis, the holders of the class C common stock and the nonvoting class A common stock participate equally in dividends as declared by the Company’s Board of Directors.

Share Repurchase Plan

The Company has a share repurchase program, approved by the Board of Directors, authorizing the Company to annually purchase up to $5.0 million of its outstanding common shares, as market and business conditions warrant, on the open market in compliance with Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. The repurchase program has been in place since December 2012, and the Board of Directors has annually renewed the repurchase program each calendar year. The Company announced on February 25, 2022, that the Board of Directors of the Company approved an increase to the limit of its annual share buyback program from $2.75 million to $5.0 million. The Company announced on September 19, 2024, that the Board of Directors of the Company approved an update authorizing the Company to repurchase up to $5.0 million of its outstanding common shares between September 13, 2024, and December 31, 2024. The total amount of shares that may be repurchased under the program was $6.5 million in 2024 and is $5.0 million in 2025. The acquired shares may be used for corporate purposes, including shares issued to employees in the Company’s share-based compensation programs. As of June 30, 2025, approximately $4.1 million remains available for repurchase under this authorization.

During fiscal years 2025 and 2024, the Company repurchased 801,043 and 767,651, respectively, of its class A shares on the open market using cash of $2.0 million and $2.2 million, respectively. To date, the Company has repurchased a total of 2,789,920 class A shares under the repurchase program using cash of $7.6 million.

The Inflation Reduction Act of 2022, which was enacted in August 2022, imposed a 1% excise tax on stock buybacks by publicly traded corporations, effective on January 1, 2023. Any excise tax incurred is recognized as part of the cost basis of the shares acquired in the Consolidated Statements of Shareholders' Equity. The impact of these provisions on the Consolidated Financial Statements was $19,000 and $22,000 in fiscal years 2025 and 2024, respectively. All amounts presented in this report related to the Company's share repurchases and the Company's share repurchase authorization exclude such excise taxes, to the extent applicable, unless otherwise indicated.

Other Activity

All stock grants vest immediately after issuance. Issuances of treasury stock for grants, bonuses, and the share repurchase plan are accounted for using the weighted-average cost basis of the shares issued. During fiscal years 2025 and 2024, no shares were granted to employees or non-employee directors.

Stock Option Plans

In November 1989, the Board of Directors adopted the 1989 Non-Qualified Stock Option Plan (“1989 Plan”), amended in December 1991, which provides for the granting of options to purchase 1,600,000 shares of the Company’s class A common stock to directors, officers and employees of the Company and its subsidiaries. Options issued under the 1989 Plan vest six months from the grant date or 20 percent on the first, second, third, fourth, and fifth anniversaries of the grant date. Options issued under the 1989 Plan expire ten years after issuance. The estimated fair value of options granted is amortized as compensation expense over the options’ vesting period. The fair value of options granted is estimated at the date of the grant using a Black-Scholes option pricing model.

Stock options granted under the 1989 Plan during the year ended June 30, 2025, are summarized below. There were no stock options granted during the year ended June 30, 2024.

		Year Ended June 30,
(dollars in thousands, except price data)		2025
Granted			125,100
Weighted Average Grant Date Fair Value per Common Share		$	1.06
Compensation Expense Recognized		$	124,000
Deferred Tax Recognized		$	26,000

The assumptions utilized to estimate the fair value of options outstanding under the 1989 Plan are presented in the following table:

Risk-free interest rate			4.1% to 4.2%
Expected volatility			57.1% to 58.2%
Expected life (in years)			5.25
Expected dividend yield			4.1% to 4.4%

The ranges represent the lowest and highest assumptions used for options granted during the period. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. Expected volatility is based on the historical volatility of the Company’s common stock. The Company did not have historical post-vesting activity under the 1989 Plan and utilized the simplified method to calculate expected term for stock options granted during the year ended June 30, 2025. The simplified method calculates the expected term as mid-point between the weighted-average time to vest and the contractual maturity. The expected dividend yield is based on the date of the grant.

Stock option transactions under the 1989 Plan for the past two fiscal years are summarized below.

						*Weighted Average*				*Weighted Average Remaining*				*Aggregate Intrinsic*
						*Exercise*				*Contractual*				*Value*
(dollars in thousands, except price data)		*Options*				*Price*				*Life in Years*				*(net of tax)*
Outstanding June 30, 2023			229,000			$	6.05
Granted			-				n/a
Exercised			-				n/a
Forfeited			-				n/a
Outstanding June 30, 2024			229,000			$	6.05
Granted			125,100			$	2.41
Exercised			-				n/a
Forfeited			(2,000	)		$	6.05
Outstanding June 30, 2025			352,100			$	4.76				7.23			$	-
Outstanding and exercisable June 30, 2025			327,100			$	4.95				7.04			$	-
Outstanding and non-vested June 30, 2025			25,000			$	2.31				9.68			$	6,000

The following table summarizes information about non-vested stock option awards under the 1989 Plan for fiscal 2025.

(dollars in thousands, except price data)		*Number of Stock Options*				*Weighted Average Grant Date Fair Value per Common Share*				*Fair Value*				*Unrecognized Compensation Expense*				*Weighted Average Remaining Recognition Period in Years*
Non-vested June 30, 2024			-			$	-			$	-
Granted			125,100			$	1.06			$	133,000
Vested			100,100			$	1.08			$	108,000
Forfeited			-			$	-			$	-
Non-vested June 30, 2025			25,000			$	0.99			$	25,000			$	9,000				0.18

In April 1997, the Board of Directors adopted the 1997 Non-Qualified Stock Option Plan (“1997 Plan”), which provides for the granting of stock appreciation rights (SARs) and/or options to purchase 400,000 shares of the Company’s class A common stock to directors, officers, and employees of the Company and its subsidiaries. Options issued under the 1997 Plan expire ten years after issuance. The estimated fair value of options granted is amortized as compensation expense over the options’ vesting period. The fair value of options granted is estimated at the date of the grant using a Black-Scholes option pricing model.

Stock option transactions under the 1997 Plan for the past two fiscal years are summarized below:

						*Weighted Average*				*Weighted Average Remaining*				*Aggregate Intrinsic*
						*Exercise*				*Contractual*				*Value*
(dollars in thousands, except price data)		*Options*				*Price*				*Life in Years*				*(net of tax)*
Outstanding June 30, 2023			2,000			$	2.74
Granted			-				n/a
Exercised			-				n/a
Forfeited			-				n/a
Outstanding June 30, 2024			2,000			$	2.74
Granted			-				n/a
Exercised			-				n/a
Forfeited			-				n/a
Outstanding June 30, 2025			2,000			$	2.74				2.72			$	-
Outstanding and exercisable June 30, 2025			2,000			$	2.74				2.72			$	-
Outstanding and non-vested June 30, 2025			-				n/a